Debt: Avoiding Repossession
Monday, February 11th 2008
Practical advice is being issued to struggling mortgage-owners in a bid to stem the rising rates of repossessions.
Following news from the Council for Mortgage Lenders (CML) the number of homes repossessed in 2007 had reached an eight-year high, Which? said struggling homeowners need not bury their heads in the sand.
Phillip Inman, author of the consumer organisation's guide Manage Your Debt, has suggested mortgage-holders could let out a room in their home to boost finances.
Alternatively, homeowners could try reducing the mortgage payments for a fixed period by extending the time over which the loan is being repaid.
Remortgaging to get a cheaper deal or suspending an endowment used to pay for some or all of the property were also valid options for anyone who thinks they might face re-payment strife this year. But financial advice should be sought before opting for this route.
Mr Inman added: "If you have fallen behind with your mortgage payments you must contact your mortgage lender as soon as you can – a head-in-the-sand attitude will only make things worse.
"Despite lenders becoming increasingly reluctant to push for repossession, these figures show they are happening at an alarming rate."
Since the CML announced its repossession figures on Friday, commentators have attempted to dampen fears the situation could get worse.
Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA) said consumers should not lose perspective.
"The 2007 repossession figures are still massively down on those seen in the 1990s, when nearly 80,000 were recorded in one year compared with 27,100 last year," he said.
